Pattie Lovett-Reid: Should you invest your CERB payment?
This is trend that I worry about— a lot.
Online brokerage activity is up significantly and there has been a spike in customers joining different platforms. One industry official tells BNN Bloomberg half a million new accounts were created in the first quarter of the year.
Isolation is driving some to fill their time with day trading activities, believing in some cases the buy and hold mentality should be pushed aside for the potential short-term win.
That is frightening enough, but follow this fact with a BNN Bloomberg viewer asking: "Should I invest my CERB payment in the markets?”
My response to that is a hard no.
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The markets have been very volatile and more recently have been swinging to the upside, so it’s easy to the think the trajectory is going to be up off the lows back on March 23. But it doesn't work that way.
Day trading is not a sport and option trading is not for the novice. You can find yourself on the wrong side of a trade very quickly and it could prove to be costly.
What can happen is a first-time investor does well with their first few trades and starts to believe their own predictive power – and that can be a very dangerous situation. The pros who have done their homework at times find it difficult to get it right going into the market and coming out.
Those collecting a government aid by way of benefits presumably need that money to get by, and the intended purpose clearly was never for short-term trading. It would be preferable to put the money toward debt repayment. That’s the sure way to build your balance sheet.